Manufacturing orders hit highest level since 1988

UK manufacturing order books swelled to a near three-decade high in June as the weaker pound pushed up demand for British-made goods, according to the Confederation of British Industry.

A survey by the UK’s biggest business group showed total orders climbed to the highest level since August 1988 in the quarter to June, driven by increases in the food and drink, tobacco and chemicals sectors.

Export orders also rose to a two-decade high, the poll of 464 factory bosses found, even as output eased back to levels seen at the start of the year.

While the Brexit-induced fall in the value of the pound has helped to boost Britain’s competitiveness, it has also pushed up import costs.

While the CBI survey suggests manufacturing output will help to offset a slowdown in Britain’s dominant services sector this year, economic growth is still expected to slow as higher inflation squeezes household incomes.

It came as Standard & Poor’s urged Theresa May to press on with negotiations to leave the EU as the rating agency signalled that a hard Brexit would result in another downgrade of the UK’s credit rating.

S&P stripped Britain of its top AAA rating with a two-notch downgrade in the wake of the Brexit vote.